Status: 11/30/2022 11:12 a.m
The outlook for the global fashion industry is bleaker than it has been in a long time, especially in Europe. The first companies such as the H&M group are already launching savings programs.
The war in Ukraine, rising inflation and disrupted supply chains pose major challenges for the fashion industry worldwide. The industry is heading for a global downturn, forecast the management consultancy McKinsey & Company and the industry information service “Business of Fashion” in their new study “The State of Fashion 2023”.
According to the study, around 56 percent of those responsible in the fashion industry expect conditions in the fashion industry to deteriorate – even though the clothing industry initially recovered quickly after the slump caused by the corona pandemic: global sales grew by 21 percent in 2021 compared to the previous year and rose again in the first half of 2022 by 13 percent.
The luxury segment is more crisis-proof
For 2023, the authors of the study are now expecting growth of five to ten percent in the luxury segment due to the effects of the Ukraine war – but only there. “For the rest of the industry, growth is likely to stagnate or even be negative in 2023,” the study says.
According to the study, there are also likely to be regional differences: companies in the fashion industry still see the greatest potential for growth in 2023 in the Middle East and North America. On the other hand, the prospects have clouded over, especially in Europe.
H&M wants to cut jobs
The Swedish fashion chain H&M announced in September that it wanted to launch a cost-cutting program. Inflation, hesitant customers and one-off costs in connection with the settlement of the Russian business had led to a slump in profits for the fashion retailer in the third quarter. The company will cut around 1,500 jobs and post a restructuring charge of around EUR 73.24 million in the fourth quarter.
“The cost and efficiency program we have initiated includes the review of our organization and we are aware that colleagues will be affected,” said CEO Helena Helmersson: “We will support our colleagues in finding the best possible solution for their next step to find.”